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A theory of search with deadlines and uncertain recall

Author Info

Listed author(s):
  • S. Nuray Akin

    (Department of Economics, University of Miami)

  • Brennan Platt

    (Department of Economics, Brigham Young University)

Abstract

We analyze an equilibrium search model where buyers seek to purchase a good before a deadline and face uncertainty regarding the availability of past price quotes in the future. Sellers cannot observe a potential buyer's remaining time until deadline nor his quote history, and hence post prices that weigh the probability of sale versus the profit once sold. The model's equilibrium can take one of three forms. In a late equilibrium, buyers initially forgo purchases, preferring to wait until the deadline. In an early equilibrium, any equilibrium offer is accepted as soon as it is received. In a full equilibrium, higher prices are turned down until near the deadline, while lower prices are immediately accepted. Equilibrium price and sales dynamics are determined by the time remaining until the deadline and the quote history of the consumer.

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File URL: http://bus.miami.edu/_assets/files/WP2012-03.pdf
File Function: First version, 2012
Download Restriction: no

Paper provided by University of Miami, Department of Economics in its series Working Papers with number 2012-3.

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Length: 40 pages
Date of creation: 12 Jan 2012
Publication status: Forthcoming: Under Review
Handle: RePEc:mia:wpaper:2012-3
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P.O. Box 248126, Coral Gables, FL 33124-6550

Phone: (305) 284-5540
Fax: (305) 284-2985
Web page: http://www.bus.miami.edu/faculty-and-research/academic-departments/economics/index.html

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Keywords: Equilibrium Search; Deadlines; Uncertain Recall; Price Posting; Reservation Prices;

Other versions of this item:

Find related papers by JEL classification:
  • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
  • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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  16. S. Nuray Akin & Brennan Platt, 2012. "Running Out of Time: Limited Unemployment Benefits and Reservation Wages," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 149-170, April.
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  20. Akın, Ş. Nuray & Platt, Brennan C., 2016. "Accounting for age in marital search decisions," European Economic Review, Elsevier, vol. 85(C), pages 245-271.
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  22. S. Nuray Akin & Brennan C. Platt, 2011. "Searching on a Deadline," Working Papers 2011-11, University of Miami, Department of Economics.
  23. Gerard R. Butters, 1977. "Equilibrium Distributions of Sales and Advertising Prices," Review of Economic Studies, Oxford University Press, vol. 44(3), pages 465-491.
  24. Maarten C.W. Janssen & Alexei Parakhonyak, 2011. "Consumer Search Markets with Costly Second Visits," Vienna Economics Papers 1102, University of Vienna, Department of Economics.
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  27. James Albrecht & Axel Anderson & Eric Smith & Susan Vroman, 2007. "Opportunistic Matching In The Housing Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 641-664, 05.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. A theory of search with deadlines and uncertain recall
    by Christian Zimmermann in NEP-DGE blog on 2012-07-15 16:31:25
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Cited by:

  1. Katja Seim & Michael Sinkinson, 2016. "Mixed pricing in online marketplaces," Quantitative Marketing and Economics (QME), Springer, vol. 14(2), pages 129-155, June.

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